Italian wine makers seeking to uncork the Indian market

Italian wine makers seeking to uncork the Indian market

Bangalore: Premium Italian wine makers, including Caviro, Cavit, Cantine and Geograficao, are exploring the possibilities of entering India, one of the fastest growing wine markets in Asia.

“The Indian market is expected to be among the best performing markets for wine in the coming years," says Marco Toti of Geograficao, part of the Italian wine delegation that is in India to explore the possibility of entering the market.

The Indian wine market is on an expansion spree and is soon expected to catch up with China and South Korea, which are the growing markets in the Asian region, in addition to Hong Kong and Japan, both of which are matured markets.

“With the UK, the US, and Germany reaching saturation point in wine consumption, wine makers are now scouting for new markets in the Asian belt. Currently, Japan accounts for nearly 28% of the wine consumption, while China and Hong Kong account for 60 per cent," Toti said.

“According to industry estimates, India imports over 2,00,000 cases of wine, with 35% being from France, 20% from Australia and Italian wines accounting for 15%," Alok Chandra, a Bangalore-based wine consultant, said.

“Wine imports are growing at 25% CAGR (Compounded Annual Growth Rate)," he said.

High-end Italian players are now scouting for importers and distributors to market their brands in India and also exploring tie-ups with leading retail chains to sell their products to the growing wine consumer segment.

“We are looking for an importer and distributor to enter the market," says Laurao of Cantine Due Palme, who is part of Opera, a consortium of cooperative agricultural enterprises and Italian Food farming Institutions, here in India to build awareness about Italian wines and agro-products.

“We are keen in foraying into the high-end segment and talks are on with leading retail chain stores to showcase our products," Cavit Area Export Manager Henrieta Schubert said.

“Our company is also tapping five-stars and restaurants, which are among the top buyers of the products, in addition to talking to premium retail units," Toti said.

“However, the greatest hurdle facing wine exporters is the prohibitive import duties, which is over 150%," said Alberto Motto, Sales Executive of Cantine Disoave, which entered the Indian market two years ago.

“Indian consumers end up paying more for the taxes than the product," he said, adding that the import duties led to the product costing over four times the cost in Italy.

The prohibitive duties were making Indian importers and distributors wary of distributing these products.

“The varying state legislations, excise duties and the varying licensing procedures was a major impediment to growing this market," Toti said.

The wine makers are targeting Mumbai, Bangalore, New Delhi, Goa, Hyderabad and Pune for selling their products.

“Currently Mumbai and Delhi account for 70% of wine consumption and Bangalore and Goa, 7% each. Wine consumption in India was growing at 25-30% per year in a five-year period," Alok said.

Another area that needs to be explored to grow the Indian market is consumer awareness. Many consumers, being new to wine culture, are still unclear about texture, taste, colour and the food that wines lend themselves to.

“Training and wider demonstrations of wine tasting could help grow the market," Toti opined.

“Italian wines go well with Indian food," Laura said.

The hot tropical weather and its spicy food lends itself perfectly to Italian wines. The sparkling white wines go well with white meat and fish while the garnet, ruby red wines go well with red meat.

Amarone della Valpolicella, a wine that has been toasted by poets and writers far back in the Roman era and made from grapes of Valpolicella picked up and left to dry on rafters, is perfectly suited to spicy and savoury dishes and also a treat for all occasions and as corroborant wine between meals.

“It is silky, smooth and soft and makes an excellent drink with Indian spicy food," he said.

As Italian wine makers and producers go all out to woo the Indian market, Motto, drawing a parallel from a wine bottle, said: “Currently there is a lot of consumer base like the base of the bottle, but the high duties were corking up the market and it is time this market gets uncorked."